Commentary: Conventional wisdom can be misleading. It says that people want the highest number of available choices when making purchasing decisions. It says the best way to share knowledge is to provide as many pieces of information as possible. It says that people are rational and are capable of easily making the best long-term decisions for themselves and their families.
Experts in behavioral economics, however, are finding all three of these statements to be inaccurate.
Why do people get easily frustrated when they have too many choices? Why does too much information sometimes paralyze us from making the best decision? And why, when people care about themselves and their families, is it so difficult to make the best benefits decisions?
While you may have just wrapped up your 2015 enrollment, now’s the time to lay the foundation for how your employees will decide on their benefits this year. Conversations about benefit choices needs to happen long before enrollment.
As more financial responsibility for benefits is being shifted to the employee and with the growth in high-deductible health plans, it’s important to help them understand what choices are available as well as the cost of those choices before they need to make a decision.
Many businesses now employ as many as four generations of workers, requiring advisers to recommend a variety of tools to communicate, educate and enroll in benefits. Employers and human resource professionals should be comfortable recommending a variety of high-tech and high-touch education and enrollment tools that:
- Match diverse employee learning styles and preferences;
- Can flex over time to match need for more or less intense education given what’s new and changing at the employer; and
- Pair well with the employer’s current or preferred technology commitments.
It’s also imperative to ensure employees are allowed the time they need to review and understand their benefits options, electing options that are right for them and their families. The number of employers providing an enrollment period of at least three weeks declined from 2009 (55% of employers) to 2012 (47%), according to the 2014 Colonial Life Employee Education and Enrollment survey. The extra time can make a huge difference, with employees who are given more time expressing higher satisfaction with the benefits education they receive and with their benefits overall. Only 7% of employees who were given less than two weeks to decide rated their benefits education as excellent or very good, and only 8% gave strong ratings to their benefits package. But giving employees three or more weeks raised those ratings to 57% for education and 53% for overall benefits.
While many of today’s younger workers want to be able to shop and purchase products online, that doesn’t mean personal benefits communication has lost its value. Younger employees are more likely to prefer using electronic tools, according to the Education and Enrollment survey, but they also lag behind older workers when it comes to understanding and valuing their benefits. According to a 2013 Colonial Life poll conducted by Harris Interactive, 98% of employees felt their personal counseling sessions were important. And 97% say it improved or significantly improved their understanding of their benefits. Again, it’s the smart combination of high-tech and high-touch that provides greatest impact. Consider face-to-face counseling sessions, where employees and counselors make elections together inside the employer’s selected benefits enrollment platform.
Americans face significant financial stress and exposure. They deserve time and support to help them navigate a complex benefits world. The workplace may be the only place most of us can access financial protection products, so it’s essential to get it right. Most importantly, in addition to crafting a diverse education plan with the help of a benefit adviser, employers can require employees to make an “active choice” at the benefit level for each available benefit, saying ‘Yes’ or ‘No’ to each program after they’ve paused to consider whether it’s right for them.
Human nature being what it is, we often overlook acting in our own best interests. An active choice design helps overcome human inertia and our tendency to underestimate our true risks. As we move into enrollment season this fall, let’s all remember employees are counting on us not only to make benefits available but to design the way we present these choices to them in such a way they’re more rather than less likely to enroll in products when they need them.
When you start planning for your next benefits enrollment, make sure your business is picking a partner that considers high-tech and high-touch, strong benefits communication and active choice, the bottom line of your company andthe wallets of your employees.
Richard Shaffer is the vice president of enrollment at Colonial Life & Accident Insurance Company. He can be reached at 312-350-3954, or by email at RShaffer@coloniallife.com.
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